Word-of-mouth communication can greatly influence and shape a person's expectations about a certain product, and more often than not play a large role in the final consumer decision.
For instance, in marketing movies, word-of-mouth feedback can make or break the movie, that is why producers take particular care of screen-testing the movie for any possible tweaks they could do render in reference to initial feedback generated. This ensures that once the movie is released to the general public there is a much bigger chance for positive word-of-mouth amongst viewers. It is powerful, influential, and best of all it is something that not even the best-funded PR machine could buy. It levels the playing field for the lower-budgeted films and gives them a chance against the big studio blockbusters which abound.
Of course, there are certain circumstances where other types of communication are more effective than word-of-mouth communication. While it is probably the most influential type of communication, it is not all- encompassing. For instance, it is highly unlikely that the typical consumer would rely on word-of-mouth for very big purchases such as cars and houses.